The lending environment for manufactured homes is tougher every day. In 2009 three big players left the ranks of manufactured home lending: Taylor Bean & Whittaker and Lend-America exited by the forced hand of federal regulators and GMAC removed themselves by choice to minimize their exposure to riskier loans (manufactured homes are considered to have a higher default rate but that is not necessarily true. This created a temendous void for manufactured home borrowers.
What does this mean for you, the borrower? Additional safeguards and cautions need to be exercised to carefully research the process. Just because a lender tells you that he can do a loan, that doesn’t mean he or she will be able to follow through. There are a lot of obstacles and hoops to jump through. First and foremost: ASK QUESTIONS:
The only fee that a loan originator can charge before issuing a GFE is the cost of a credit report. However, it is important to note that a GFE is not a loan commitment—it is simply an estimate of settlement charges a borrower is likely to incur to obtain a specific loan. So just because you receive an acknowledgement of receipt of your GFE, the lender cannot automatically conclude that this is an expression of your intention to proceed with the loan or a promise by the lender that they are able to provide you with the loan. Generally speaking if a borrower does not express an intent to continue with an application within ten business days after the GFE is provided, the loan originator is no longer bound by the GFE. Also worthy of note is if a GFE was provide but the interest rate has not been locked, if there are changes to the interest rate dependent charges or loan terms a revised GFE must be issued. clearly discloses key loan terms and closing costs to the borrower.
If you need a permanent foundation or an engineer specifies a repair, you need to carefully evaluate this cost and the consequence if the loan does not close for any reason. Work closely with your loan officer and processor and ask, ask, ask. We can guarantee if we are part of the loan process, we will diligently protect your interests and not proceed with either a retrofit or an engineer’s certification until we can be certain this is one of the last conditions of the loan.
If you have not yet chosen a lender, you might want to consider using a manufactured home specialist right from the beginning. The following lenders specialize in manufactured home loans and understand the unique requirements of a manufactured home loan:
For FHA-insured loans:
For Reverse Mortgage or HECM loans:
For VA or Cal-Vet Loans: